Sunday, May 11

Elan “Will Run Out of Money in 2 Years”

The clock is ticking for Elan Pharmaceuticals. Despite predicting it will record $1 billion in revenue in 2008, the company could run out of money in two years. The company is considering closing two U.S. facilities because its multiple sclerosis drug Tysabri is growing more slowly and doctors are worrying over whether it causes brain infections. Here’s the key nugget from Reuters:
In the nine months ended September 2008, Elan posted a net loss of $240.5 million. It is burning cash at a rate of more than $300 million a year, and it has $1.7 billion in debt that comes due over the next five years.
Another patient was reported with the PML brain infection in late October. The cases have hammered Elan’s stock and CEO Kelly Martin says he doesn’t think he can get a buyer for Elan’s drug technology business in the current market. The whole thing is pouring a lot of cold water on Elan-boosters who thought the company — and its shares — was ripe for takeover.